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Revenue
 9 Months Ended
Sep. 30, 2025
Revenue From Contract With Customer [Abstract]  
Revenue
3.
Revenue

Revenue is primarily derived from services rendered to patients for inpatient psychiatric and substance abuse care, outpatient psychiatric care and residential treatment. The services provided by the Company have no fixed duration and can be terminated by the patient or the facility at any time, and therefore, each treatment is its own stand-alone contract.

Services ordered by a healthcare provider in an episode of care are not separately identifiable and therefore have been combined into a single performance obligation for each contract. The Company recognizes revenue as its performance obligations are completed. The performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits of the healthcare services provided. For inpatient services, the Company recognizes revenue equally over the patient stay on a daily basis. For outpatient services, the Company recognizes revenue equally over the number of treatments provided in a single episode of care. Typically, patients and third-party payors are billed within several days of the service being performed or the patient being discharged, and payments are due based on contract terms.

As the Company’s performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as its patients typically are under no obligation to remain admitted in the Company’s facilities.

The Company disaggregates revenue from contracts with customers by service type and by payor.

The Company’s facilities and services provided by the facilities can generally be classified into the following categories: acute inpatient psychiatric facilities; specialty treatment facilities; CTCs; and residential treatment centers.

Acute inpatient psychiatric facilities. Acute inpatient psychiatric facilities provide a high level of care in order to stabilize patients that are either a threat to themselves or to others. The acute setting provides 24-hour observation, daily intervention and monitoring by psychiatrists.

Specialty treatment facilities. Specialty treatment facilities include residential recovery facilities and eating disorder facilities. The Company provides a comprehensive continuum of care for adults with addictive disorders and co-occurring mental disorders. Inpatient, including detoxification and rehabilitation, partial hospitalization and outpatient treatment programs give patients access to the least restrictive level of care.

Comprehensive treatment centers. CTCs specialize in providing medication-assisted treatment in an outpatient setting to
individuals addicted to opioids such as opioid analgesics (prescription pain medications).

Residential treatment centers. Residential treatment centers treat patients with behavioral disorders in a non-hospital setting. The facilities balance therapy activities with social, academic and other activities.

The table below presents total revenue attributed to each category (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Acute inpatient psychiatric facilities

 

$

471,455

 

 

$

439,788

 

 

$

1,379,088

 

 

$

1,269,593

 

Specialty treatment facilities

 

 

148,153

 

 

 

155,787

 

 

 

430,882

 

 

 

450,668

 

Comprehensive treatment centers

 

 

144,506

 

 

 

134,174

 

 

 

423,013

 

 

 

400,984

 

Residential treatment centers

 

 

87,459

 

 

 

85,885

 

 

 

258,327

 

 

 

258,480

 

Revenue

 

$

851,573

 

 

$

815,634

 

 

$

2,491,310

 

 

$

2,379,725

 

The Company receives payments from the following sources for services rendered in its facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by the Centers for Medicare and Medicaid Services (“CMS”) and other programs; and (iv) individual patients and clients. The recognition of revenue under certain state government programs can depend on the timing of the programs’ approval by regulatory authorities. Based on the timing of approval of one such program, during the nine months ended September 30, 2025, the Company recognized $65.6 million of revenue, $34.4 million of which related to services rendered in the year ended December 31, 2024.

The Company determines the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience. Most of the Company’s facilities have contracts containing variable consideration. However, it is unlikely a significant reversal of revenue will occur when the uncertainty is resolved, and therefore, the Company has included the variable consideration in the estimated transaction price. Subsequent changes resulting from a patient’s ability to pay are recorded as bad debt expense, which is included as a component of other operating expenses in the condensed consolidated statements of income. Bad debt expense for the three and nine months ended September 30, 2025 and 2024 was not significant.

The following table presents the Company’s revenue by payor type and as a percentage of revenue (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

Commercial

 

$

211,879

 

 

 

24.9

%

 

$

216,050

 

 

 

26.5

%

 

$

613,634

 

 

 

24.6

%

 

$

621,702

 

 

 

26.1

%

Medicare

 

 

125,542

 

 

 

14.7

%

 

 

118,022

 

 

 

14.5

%

 

 

359,801

 

 

 

14.4

%

 

 

339,117

 

 

 

14.3

%

Medicaid

 

 

484,171

 

 

 

56.9

%

 

 

454,319

 

 

 

55.7

%

 

 

1,431,374

 

 

 

57.5

%

 

 

1,343,081

 

 

 

56.4

%

Self-Pay

 

 

17,809

 

 

 

2.1

%

 

 

14,824

 

 

 

1.8

%

 

 

48,672

 

 

 

2.0

%

 

 

44,764

 

 

 

1.9

%

Other

 

 

12,172

 

 

 

1.4

%

 

 

12,419

 

 

 

1.5

%

 

 

37,829

 

 

 

1.5

%

 

 

31,061

 

 

 

1.3

%

Revenue

 

$

851,573

 

 

 

100.0

%

 

$

815,634

 

 

 

100.0

%

 

$

2,491,310

 

 

 

100.0

%

 

$

2,379,725

 

 

 

100.0

%